+ 22 t Objectives: Develop the ability to read a company's 10-K report and explain variations in accounts. Background: Between October 1, 2017 and September 30, 2018, the value of long-term liabilities reported by Starbucks increased significantly. The table below contains long-term liabilities and other financial data for this time period: Oct-2 Oct-14 Sep-30 Sep-290 ($ Millions)* 2016 2017 2018 201942 Current liabilities Current portion of LT debt $ 400 $ 350 Long-term liabilities LT debt 3,185 3,933 9,090 11,167 Deferred revenue- 4 6,776 6,744 Shareholders'equity Retained earnings 5,950 5,563 1,457 (5,771) AOCIE (108) (156) (330) (503) - t + -+ + Pe + + t + Pe t + 1 Total net revenue Interest expense- Net income- 21,316 22,387 24,720 26,509 81 93 170 331 - $ 2,818 $ 2,885 $ 4,518 - $ 3,599 t Required: Q1. Prepare a reconciliation of the beginning and ending balances of debt (both long and short term) for the fiscal year that ended on 9-30-2018. Your reconciliation should be based on debits and credits to a "master" debt account reflecting actual transactions. Include references to 10-K, with item and page numbers.) (30 pts.l. Q2. Prepare a reconciliation of the beginning and ending balances of deferred revenue for the fiscal year that ended on 9-30-2018. Your reconciliation should be based on debits and credits to a "master" deferred revenue account reflecting actual transactions. Include references to 10-K, with item and page numbers.) (20 pts.lv Q3. Based on information presented in the company's 10-K for 9-30-2018, what do you believe was the reason for the increase in debt addressed in 01? Explain your reasoning. (Include references to 10-K, with item and page numbers.) (15 pts.l+ Q4. Based on information presented on the company's 10-K for 9-30-2018, what do you believe was the reason for the increase in deferred revenue addressed in Q2? Explain your reasoning. (Include references to 10-K, with item and page numbers.)[15 pts.lu Presentation (10 points), references (10 points), and quality of answers, as measured by the points assigned to each question above. Rubrics: + 22 t Objectives: Develop the ability to read a company's 10-K report and explain variations in accounts. Background: Between October 1, 2017 and September 30, 2018, the value of long-term liabilities reported by Starbucks increased significantly. The table below contains long-term liabilities and other financial data for this time period: Oct-2 Oct-14 Sep-30 Sep-290 ($ Millions)* 2016 2017 2018 201942 Current liabilities Current portion of LT debt $ 400 $ 350 Long-term liabilities LT debt 3,185 3,933 9,090 11,167 Deferred revenue- 4 6,776 6,744 Shareholders'equity Retained earnings 5,950 5,563 1,457 (5,771) AOCIE (108) (156) (330) (503) - t + -+ + Pe + + t + Pe t + 1 Total net revenue Interest expense- Net income- 21,316 22,387 24,720 26,509 81 93 170 331 - $ 2,818 $ 2,885 $ 4,518 - $ 3,599 t Required: Q1. Prepare a reconciliation of the beginning and ending balances of debt (both long and short term) for the fiscal year that ended on 9-30-2018. Your reconciliation should be based on debits and credits to a "master" debt account reflecting actual transactions. Include references to 10-K, with item and page numbers.) (30 pts.l. Q2. Prepare a reconciliation of the beginning and ending balances of deferred revenue for the fiscal year that ended on 9-30-2018. Your reconciliation should be based on debits and credits to a "master" deferred revenue account reflecting actual transactions. Include references to 10-K, with item and page numbers.) (20 pts.lv Q3. Based on information presented in the company's 10-K for 9-30-2018, what do you believe was the reason for the increase in debt addressed in 01? Explain your reasoning. (Include references to 10-K, with item and page numbers.) (15 pts.l+ Q4. Based on information presented on the company's 10-K for 9-30-2018, what do you believe was the reason for the increase in deferred revenue addressed in Q2? Explain your reasoning. (Include references to 10-K, with item and page numbers.)[15 pts.lu Presentation (10 points), references (10 points), and quality of answers, as measured by the points assigned to each question above. Rubrics
